Bill Gunderson’s Daily Market Observations Monday, Sept. 30, 2019

Monday 9/30/19=DJIA +132 NASDAQ +60 U.S. 10yr=1.67%
Another Fake News Story from Bloomberg?
Minnesota Oct. 15, 16, & 17-Bill Gunderson and his team will be at the Radisson Blu-Mall of America. Call (855)611-BEST or visit our website to make an appointment.
Daily Wrap: It would that the story that clobbered the market on Friday was a false story put out by Bloomberg. Bloomberg has done this numerous times in the past. The news that the Trump administration was considering a limit on U.S. investments in China was flatly denied by Peter Navarro, one of Trump’s chief trade negotiators. This news clobbered the tech stocks and the Chinese stocks on Friday. Thanks Bloomberg!
Today was the last day of the third quarter of 2019, and the start to a new trading week. It was a very good day in the market, especially in the Nasdaq.
Trading: It did not do any buying or selling today.

Tweets: I sent out tweets on GMO, NKE, PCTI, CONE, PLMR, NEE, LULU, CMG, FAKE NEWS, and AAPL today.

This was the FAKE NEWS that sent the tech and Chinese stocks reeling on Friday.

White House mulls limits on U.S. portfolio flows into China - Bloomberg
• The Trump administration is considering ways to limit U.S. investors' portfolio flows into China, Bloomberg reports, citing people familiar with the deliberations.
• That could affect billions of dollars of investments tied to major indexes.

China will continue to open their financial markets.

China to continue opening financial markets
• China said it will continue to open up its financial markets and to encourage foreign investment even as reports say the Trump administration is considering limits on fund flows to China.
• “We will take further steps to promote high quality two-way financial opening, encourage foreign financial institutions and funds to invest in the domestic financial market, to boost the competitiveness and dynamism of the domestic financial system,” said a summary from the eighth meeting of the Financial Stability and Development Committee.
• "China could explore European, Southeast Asian, and the Belt and Road markets in lieu of the U.S.," Liao Qun, chief economist with China Citic Bank International, told Bloomberg News.
• The reports about potentially limiting flows from the U.S. into China come as the two countries are preparing for the next round of trade talks after China's week-long national holidays that start on Tuesday.

Bloomberg’s story flatly denied by U.S. Treasury

No plan to block Chinese listings - U.S. Treasury
• "The (Trump) administration is not contemplating blocking Chinese companies from listing shares on U.S. stock exchanges at this time," according to Treasury spokeswoman Monica Crowley, following reports on Friday that suggested otherwise.
• The rumors unnerved markets, hitting U.S.-listed shares of China-based companies and causing the S&P 500 to close about 0.5% lower.
• Other potential measures - including limiting Americans' exposure to the Chinese market through government pension funds, as well as ways to put caps on the Chinese companies included in stock indexes - were not ruled out.

Third quarter GDP estimate.

Atlanta Fed boosts Q3 GDPNow estimate to 2.1%
• The Atlanta Fed pushes up its Q3 real GDP model estimate to 2.1% from 1.9%.
• Cites increase in estimate for Q3 real gross private domestic investment growth more than offsetting a decrease in the estimate for real consumer spending growth.

Deals slowing.

M&A deal activity slows in first three quarters of 2019
• Global dealmaking grinds to the slowest pace in more than two years as fears of an economic slowdown deflate corporate confidence and a $200B tobacco industry merger was scuttled due to shareholder criticism.
• So far this year, total M&A activity has fallen 11% to $2.8T, with ~$740B of deals in Q3, according to data provider Refinitiv.
• A wave of transactions greater than $10B in size have helped to offset a decline in dealmaking among smaller companies and a slight drop-off in private equity buyouts.
• The three months to the end of September was the quietest quarter for announced takeovers since mid-2017.
• European dealmaking fell 32% to $556B vs. the same period a year ago. Activity in Asia was also off sharply.
• Data from Refinitiv shows M&A fees earned by Citi (NYSE:C), Morgan Stanley (NYSE:MS), UBS (NYSE:UBS), and Credit Suisse (NYSE:CS) are all off at least 20% YTD.

No Vaping Zone.

Vaping ban in India to remain
• A series of protests in India against the government's ban on electronic cigarettes only drew about 400 people in total with some people reportedly being in fear of being targeted by police, according to Reuters.
• A government official confirms that there are no plans to reverse the ban.
• The electronic cigarettes ban has forced Philip Morris International (NYSE:PM) and Juul (JUUL) to halt their vaping strategies in India.

Another mall casualty.

Forever 21 joins the mall graveyard
• Mall retailer Forever 21 officially files for bankruptcy.
• The company says the restructuring will allow it to focus on the profitable core part of its operations and shut some international locations.
• "We have requested approval to close up to 178 stores across the U.S. The decisions as to which domestic stores will be closing are ongoing, pending the outcome of continued conversations with landlords," reads a Forever 21 statement.
• Forever 21 is Simon Property Group's (NYSE:SPG) seventh-largest in-line tenant in terms of how much rent it brings the landlord, with 99 stores across its portfolio.

The stock is cheap, but controversial.

Summit launches Buy on Facebook, 'king of social media'
• Summit Insights has initiated coverage on Facebook (FB -2.2%) at Buy with a strong endorsement, pointing to "tremendous" earnings power and cash generation.
• That's due to a wide moat as "the undeniable king of social media, online advertising revs, and users," analyst Jonathan Kees says.
• There's headline risk from regulatory fronts, but the company has multiple and expanding revenue drivers, including "establishing e-commerce on Instagram, contextual advertising in video, and extending advertising into WhatsApp and Messenger."
• The firm has a $220 price target, implying about 25% upside from a current $176.11.
• Sell-side analysts rate Facebook Outperform on average, and Seeking Alpha authors are Bullish. It has a Quant Rating of Neutral.

Bill Gunderson

Bill Gunderson

Bill Gunderson is a wealth manager, syndicated financial talk show host, and author of the Best Stocks Now -- one of the top 10 best selling financial aps in the world.

He is a frequent guest on local and national media, including CNBC, Fox Business, Fox News, Bloomberg, Barron's, Forbes, and others.

His wealth management business caters to high net worth individuals clients all over the world. He would be happy to look at your portfolio.

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